Vancouver, BC, May 27, 2021 (GLOBE NEWSWIRE) -- Draganfly Inc. (OTCQB: DFLYF) (CSE: DFLY) (FSE: 3U8) (“Draganfly” or the “Company”), an award-winning, industry-leading drone solution developer and operator is pleased to announce its first quarter financial results. Revenue growth for the first quarter was driven by a combination of organic growth, the acquisition of Dronelogics Systems Inc. (“Dronelogics”), and sales from COVID-19 screening products.
Key Financial and Operational Highlights for Q1 2021:
- Revenue growth for the first quarter year over year increased 209.8% or $1,042,679 from $497,057 in the first quarter of 2020 to $1,539,736 with the bulk of this revenue coming from product sales. Engineering services revenue was down substantially year over year in the first quarter of 2021 due to the continued impact from one of the Company’s Engineering Services customers that has been effected by the pandemic. Drone services sales of $409,963 made up most of the balance of the revenues.
- Gross margin percentage for Q1 2021 was 33.4% compared to 22.2% in Q4 2020. The increase is due to the sales mix of the products sold. Gross margin was down 62.0% year over year in the first quarter as product sales tend to have a much lower margin than those of the the companies traditional custom engineering services which decreased in volume largey due to COVID-19.
- Cash balance on March 31, 2021 of $21.1 million compared to 2.0 million on December 31, 2020.
- Raised US$16,450,000 million through the issuance of securities under the Company’s Regulation A offering filed with the U.S. Securities and Exchange Commission.
- The accounting treatment of a $41.8 million non-cash liability from USD warrants that were issued during the Company’s Regulation A Offering contributed to the comprehensive loss for the Q1 2021 $44.9 million compared to $3.7 million in Q4 2020. The year over year comprehensive loss increased 4,020.4% as Q1 2020 did not have the treatment of the USD warrants from the Company’s Reg A financing. Q1 2020 also had less office and miscellaneous expenses. The Company’s working capital deficit of $20,834,520, as at March 31, 2021, would be a working capital surplus of $20,184,652, if the non-cash liability for outstanding USD warrants were excluded. The Company’s working capital as at December 31, 2020 was $1,214,371.
- Secured $1 million flight services contract to deploy EagleEye™ AI flight services with Windfall Geotek Inc. Windfall Geotek flies mining prospect with magnetometers with data placed into EagleEye™ and provides recommended targets for mining companies to drill.
- Closed an acquisition of assets from Vital Intelligence Inc. on March 25, 2021, in consideration for (a) a cash payment of $500,000 with $250,000 paid at closing and $250,000 to be paid on the six-month anniversary date of closing; and (b) 6,000,000 units of the Company with each unit being comprised of one common share of the Company and one common share purchase warrant. The units are subject to escrow with 1,500,000 units released at closing and the remainder to be released upon the Company reaching certain revenue milestones received from the purchased assets. Each warrant entitles the holder to acquire one common share for a period of 24 months at an exercise price of $2.67 per common share and the Company can accelerate the expiry date of the warrants after one year in the event the underlying common shares have a value of at least 30% greater than the exercise price of the warrants.
Cameron Chell, CEO of Draganfly, said: “Another quarter of 200% plus year over year growth and a $20 million plus working capital surplus, not including non-cash liabilities positions Draganfly to continue our mission to be the leading commercial drone manufacturer and solutions provider in North America within the next few years.”
| For the three months ended March 31, | 2021 | 2020 | |||||||
| Total revenues | $ | 1,539,736 | $ | 497,057 | |||||
| Gross Profit (as a % of revenues) | 33.4 | % | 88.0 | % | |||||
| Net loss | (44,923,934)(1) | (1,104,108 | ) | ||||||
| Net loss per share ($) | |||||||||
| (0.48 | ) | (0.02 | ) | |||||
| (0.48 | ) | (0.02 | ) | |||||
| Comprehensive loss | (44,914,647)(1) | (1,090,294 | ) | ||||||
| Comprehensive loss per share ($) | |||||||||
| (0.48 | ) | (0.02 | ) | |||||
| (0.48 | ) | (0.02 | ) | |||||
| Change in cash and cash equivalents | $ | 19,076,220 | $ | (531,890 | ) | ||||
| As at | March 31, 2021 | December 31, 2020 | |||||
| Total assets | $ | 45,055,832 | $ | 7,100,567 | |||
| Working capital* | (20,834,520)(2) | 1,214,371 | |||||
| Total non-current liabilities | 146,397 | 104,885 | |||||
| Shareholders’ equity | $ | 381,485 | $ | 3,848,205 | |||
| Number of shares outstanding | 134,144,435 | 72,781,413 |
Notes:
(1) The net loss and comprehensive loss for the three months ended March 31, 2021 would have been $3,904,762 and $3,895,475, respectively, but for a non cash change in fair value of derivative liability of $41,019,172 as a result of the issuance of common share purchase warrants with an exercise price in United States dollars relating to the Company’s Regulation A offering.
(2) The working capital for the three months ended March 31, 2021 would have been $20,184,652 but for a non cash change in fair value of derivative liability of $41,019,172 as a result of the issuance of common share purchase warrants with an exercise price in United States dollars relating to the Company’s Regulation A offering.
| 2021 Q1 | 2020 Q4 | 2020 Q1 | |||||||
| Revenue | $ | 1,539,736 | $ | 1,486,009 | $ | 497,057 | |||
| Cost of goods sold | $ | (1,024,729 | ) | $ | (1,155,491 | ) | $ | (59,786 | ) |
| Gross profit | $ | 515,007 | $ | 330,518 | $ | 437,271 | |||
| Gross margin – percentage | 33.4 | % | 22.2 | % | 88.0 | % | |||
| Operating expenses | $ | (4,839,600 | ) | $ | (3,359,508 | ) | $ | (1,655,233 | ) |
| Operating loss | $ | (4,324,593 | ) | $ | (3,028,990 | ) | $ | (1,217,962 | ) |
| Operating loss per share – basic and diluted | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.02 | ) |
| Other income (expense) | $ | (40,599,341)(3) | $ | (713,885 | ) | $ | 113,854 | ||
| Other comprehensive income | $ | 9,287 | $ | 1,235 | $ | 13,814 | |||
| Comprehensive loss | $ | (44,914,647)(3) | $ | (3,741,640 | ) | $ | (1,090,294 | ) | |
| Comprehensive loss per share – basic and diluted | $ | (0.48 | ) | $ | (0.05 | ) | $ | (0.02 | ) |
Note 3: The other expense and comprehensive loss for the first quarter of 2021 include a change in fair value of derivative liability for USD warrants of $41,019,172 and would otherwise be income of $419,831 and loss of $3,895,475, respectively.
All financial information in this press release is prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. The Company will file its consolidated financial statements for the year ended December 31, 2020, and associated management discussion and analysis under the Company's profile on SEDAR at www.sedar.com.
Note 1: this press release refers to "gross margin" which does not have any standardized meaning prescribed by generally accepted accounting principles in Canada ("GAAP"). Gross margin is defined as gross profit divided by revenue and is often presented as a percent. Draganfly’s management believes that gross margin and other non-GAAP measures provide useful information to investors as it provides them with supplemental measures of the Company's operating performance and liquidity and thus highlights trends in the Company's business that may not otherwise be apparent when relying solely on GAAP measures. Management also uses non-GAAP measures and metrics in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of executive compensation. For more information with respect to financial measures which have not been defined by GAAP, including reconciliations to the closest comparable GAAP measure, see the "Non-GAAP Measures and Additional GAAP Measures" section of the Company’s most recent MD&A which is available on SEDAR.
About Draganfly
Draganfly Inc. (CSE: DFLY; OTCQB: DFLYF; FSE: 3U8) is the creator of quality, cutting-edge software, and systems that revolutionize the way organizations can do business and service their stakeholders. Recognized as being at the forefront of technology for over 22 years, Draganfly is an award-winning, industry-leading manufacturer and technology developer serving the public safety, agriculture, industrial inspections, security, and mapping and surveying markets. Draganfly is a company driven by passion, ingenuity, and the need to provide efficient solutions and first-class services to its customers around the world with the goal of saving time, money, and lives.
For more information on Draganfly, please visit us at www.draganfly.com.
For additional investor information, visit https://www.thecse.com/en/listings/technology/draganfly-inc, https://www.otcmarkets.com/stock/DFLYF/overview or https://www.boerse-frankfurt.de/aktie/draganfly-inc.
Media Contact
Arian Hopkins
Email: media@draganfly.com
Company Contact
Cameron Chell, CEO
PH: 310-658-4413
Email: info@draganfly.com
Forward-Looking Statements
This release contains certain “forward looking statements” and certain “forward-looking information” as defined under applicable Canadian securities laws. Forward-looking statements and information can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans” or similar terminology. Forward-looking statements and information are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that, while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of the Company to control or predict, that may cause the Company’s actual results, performance or achievements to be materially different from those expressed or implied thereby, and are developed based on assumptions about such risks, uncertainties and other factors set out here in, including but not limited to: the potential impact of epidemics, pandemics or other public health crises, including the current outbreak of the novel coronavirus known as COVID-19 on the Company’s business, operations and financial condition, the successful integration of technology, the inherent risks involved in the general securities markets; uncertainties relating to the availability and costs of financing needed in the future; the inherent uncertainty of cost estimates and the potential for unexpected costs and expenses, currency fluctuations; regulatory restrictions, liability, competition, loss of key employees and other related risks and uncertainties disclosed under the heading “Risk Factors“ in the Company’s most recent filings filed with securities regulators in Canada on the SEDAR website at www.sedar.com. The Company undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents managements’ best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.